Bank of the Ozarks Finances Midtown South Office Buy

Dalan Managementpaid $36 million for two Midtown South office properties, as part of a 1031 exchange, with a $25 million mortgage from Bank of the Ozarks, according to HKS Capital Partners, which brokered the loan.

The four-year loan has a rate of 375 over Libor with a floor of 4 percent, according to a representative for the broker. HKS principals Jerry Swartz and Ayush Kapahi worked on the deal.

The company bought the 12-story buildings at 10 East 33rd Street and 12 East 33rd Street, between Madison and Fifth Avenues from Adee Associates, said Daniel Wrublin, a co-founder and principal at Dalan Management, after selling three Washington Heights buildings in November for $16 million. Commercial Observer first reported the sale earlier this month.

The buildings are comprised of 22 full-floor office lofts and ground-floor retail space. The East 33rd Street buildings comprise 61,100 square feet and could be converted into residences or a hotel. Adee bought them in the 1980s.

Each building includes a 2,000-square-foot store. The 10 East 33rd Street property’s retail space is occupied by a nail salon and the neighboring building has a dry cleaning business.

In the short run, Dalan plans to just update the spaces, Mr. Wrublin said. “Down the road the potential is to convert [the site] or sell it to somebody to convert it,” he said.

Dalan has tapped William Cohen and David Emden of Newmark Grubb Knight Frank to market the office space.